The latest iteration of Mitchell’s Industry Trends Report(ITR) begins with an examination of the impact of the Japanesetsunami on vehicle parts pricing. Greg Horn, ITR editor-in-chiefand Mitchell’s vice president of industry relations, alludes tostories of salvage yards hoarding parts, and asks some questionsthat have weighed heavily on the minds of all involved in thecollision parts industry—from repair shops to insurers—since thedisaster.

Although many presumed that aftermarket parts usage wouldincrease, and that OEM components would be increasingly difficultto come by, Horn quickly dispels these notions in the openingfeature of the 4Q publication. He then leverages the MitchellCollision Parts Price Index (MCPPI)—a metric similar to theConsumer Price Index (CPI)—to identify trends in parts pricesversus inflation and assess the impact of the tsunami on partsselection behavior.

“The tsunami in Japan was incredibly tragic and affected somany,” says Horn. “After having a chance to absorb the dramaticimpact on their nation, we wanted to see how it would affect thecollision repair community. Our in-depth analysis using the MCPPIindicates the tsunami had little net impact on parts pricing.Isolating the Japanese vehicle parts index and breaking out thesubset of Japanese make by part type shows that the Japanesevehicle index mirrors broader market trends. In the aggregate,parts prices increased, even in a year where inflation has slowedto the lowest rate since we began measuring the index.

“OEM-indexed parts decreased in price, whileaftermarket and remanufactured parts increased slightly, he adds.“Spot shortages and hoarding may have occurred immediately afterthe tragic events in the spring but had little material impact onJapanese vehicle parts prices.”

Mitchell created the MCPPI specifically for the collision repairindustry and designed it to analyze and track parts price changesusing the data for the top 20 most replaced collision parts.

Mitchell used the most up-to-date MCPPI data to examine the mostfrequently replaced collision parts. The company contrasted thatwith a subset of Japanese-only vehicle parts to reveal thetrue impact of the tragic tsunami this past spring on Japanesevehicle parts pricing, including whether costs increased as aresult of shortages.

“Delving into insurance claims data helps the P&C andcollision repair industries assess marketplace conditions andadjust accordingly, which is critical since parts compriseapproximately 42 percent of average repairable estimate dollars anddirectly impact estimate severity,” Horn explains. "Being aware ofthe impact of significant events and being armed with the latestcollision repair information and analysis helps our clientsincrease customer satisfaction, thus improving their businessperformance.”